The deal to end the industrial dispute between Royal Mail and the Communication Workers Union remains to be agreed. But the damage that these strikes have already inflicted on the British postal service should not be underestimated.
First there is the financial cost to consider. The stoppages over recent weeks are estimated to have cost Royal Mail more than £200m. But more damaging has been the cost to Royal Mail's reputation. The patience of its customers has been sorely tested of late. Those sending personal letters have been plunged into uncertainty, while businesses – which provide the vast bulk of Royal Mail's revenue – have seen their profits dented by the industrial action. Many will surely think twice before relying on Royal Mail again.
This is where the real problem lies. The strikers have been behaving as if Royal Mail were still a monopoly. This may still be true for those sending personal letters. But, since last year, 17 other companies have been in competition with Royal Mail for business delivery services. Some large firms have already turned to these competitors. Royal Mail has lost 40 per cent of the corporate market to its rivals in less than two years. Even the Government is gradually moving away from Royal Mail. More business customers will follow suit as a result of this latest round of disruption.
The brutal fact is that the users of Royal Mail have an interest in getting their mail delivered on time, not in protecting the working arrangements or pension rights of postal workers. That the Communication Workers Union has failed to recognise this is indicative of weak leadership. And its failure to condemn the wildcat strikes taking place in Liverpool and London has not bolstered its position either.
That said, the crisis has been poorly handled by Royal Mail. Two years ago, the chief executive, Adam Crozier, seemed to have turned the service around. More mail was being delivered and hefty annual losses overturned. Now much of that good work has gone out of the window.
This is not entirely the fault of Mr Crozier. The Government's postal sector reforms were not well thought through. Liberalisation proved more expensive for Royal Mail than expected, forcing it to push for savings. But the company could still have implemented the reform programme more sensitively. Presenting changes to shift times as a fait accompli was always going to be antagonistic to such an instinctively militant workforce.
Both the unions and management have claimed all along to have had the best interests of the postal service at heart. But the public has been left wondering what the point is of a national, subsidised, postal service that – for whatever reason – fails to deliver.Reuse content